China’s auto industry prepares for sixth generation emissions standards

Manufacturers operating in the world's biggest car market are readying themselves for China 6 emissions standards.

August 2019 , Featured:

Automotive World

August 2019 - Manufacturers operating in the world's biggest car market are readying themselves for China 6 emissions standards. Modelled on European Union standards, these will arrive in two phases. ‘6a' will take effect from January 2020, which calls for a carbon monoxide reduction of 30% from 1g/km to 0.7. 6b is scheduled for January 2023, which along with further carbon monoxide reductions down 0.5g/km will put stricter limits on nitrogen oxides and particulate matter (PM) into effect. In addition, the sixth generation of standards will introduce metrics not previously used in the country: limits for nitrous oxide, and particle number, the number of solid particles a vehicle can emit as measured by unit/km. 

Nicolas Pechet, Senior Partner at Solidiance, a strategy consultancy focusing on Asian markets, says the incoming regime is indicative of a more wide-ranging approach to tackling the Chinese emissions problem, but that it will clearly take some time for change to benefit the lives of its citizens. "It's clear that emission reductions are expected to happen across the board," he says, "however the first phase deals only in CO2 reduction. The rest will not arrive until 2023. NOx and PM are the critical air pollutants in China coming from vehicles, with reduction targets at 40% and 33% respectively." 

China's pollution has led to a national health crisis. Images of China's smog-ridden megacities, suffused with dangerously high levels of the carcinogenic PM2.5, have circulated throughout the world. It is true that the situation in urban centres is improving, with Beijing recording less heavily polluted days in 2018; 15 such days were recorded, compared with 2013's 58. The average PM2.5 density dropped to 51mg per cubic metre, a 12.1% drop. 

However, central government wants more. A June 2018 report from the Ministry of Ecology and Environment confirmed that along with coalburning, vehicle emissions were a major source of what air pollution remains. The total Chinese car parc rose to 310 million vehicles over the course of 2017. As part of the 'War on Pollution', President Xi Jinping has previously expressed his wish to 'return the blue sky to the people'. 

So, can the manufacturers do it? Pechet suggests that some are already on track. "Several models from Chinese automakers, both Sino-foreign JVs and Chinese companies, are already China 6 ready," he says. "For example, Geely has six compliant models, whilst Changan and SAIC have five and four respectively." Automakers have already witnessed the state's willingness to step in when manufacturers fail to comply: in January 2018, production of more than 500 model variants across several smaller automakers that did not meet standards was suspended. This affected both domestic manufacturers and the joint ventures which foreign automakers are required to start to build in the market. 

But as DuckerFrontier's Markus Pfefferer points out, government data would suggest only 554 models on the market meet the China 6 standards, which is equivalent to around 12% of China 5 models. "Most of these are JV brands and imported brand models," says Pfefferer, the consulting company's Managing Director for the Asia-Pacific region. "There are only 20 models from domestic independent brands. It is difficult for car companies to adjust in a short period of time, and difficult to iterate products in the short term. Therefore, this has caused insufficient supply among the dealers." 

The introduction of technologies to clean up internal combustion engines (ICE) will be key, including fuel injection, optimising engine burn and modern intake and exhaust structures. "Beyond the engine, we'll see electronic control unit improvements, carbon tank volume increases, fuel system saleability improvements and upgrades of on-board diagnostic systems." But of course, automakers are also eyeing up the opportunities for electrification, in the world's largest electric vehicle (EV) market. 

New energy vehicles 

Manufacturers will embrace models from across the electrification spectrum, says Pechet. "Currently, plug-ins account for around 25% of all new energy vehicle (NEV) sales by volume, and are expected to increase its share over the next few years," he suggests. "Meanwhile, 48V mild hybrids are expected to reduce CO2 emissions of a vehicle by 13% to 21%. As such, fitting a China 5 vehicle with a mild hybrid system may not be enough to comply with China 6." The national target for overall battery EVs and plug-in hybrid production is two million units by 2020, and major players have expressed confidence. In China, VW, for example, has announced a major push into the EV market with a fully electric vehicle on Chinese roads by 2021. 

However, the government's recent decision to cut back EV subsidies will not make the challenge any easier for automakers. The previous incentive of Yuan 50,000 (US$7,457) will be cut in half to 25,000. Furthermore, vehicle ranges must exceed 250km to qualify. The government has previously indicated it wants to eliminate subsidies altogether by 2020. 

China's coal dependence remains an issue - electricity generated by coal rose 6% in 2018 to 4.9 trillion kw/h - but for now it would seem regulators are not about to make moves that could hinder EV deployment through taxation on electricity used to charge the vehicles. "At the moment, there are no indications that energy production and energy consumption for charging EVs will be linked," says Pechet. "China is working towards improving its energy mix, by reducing dependence on coal to 50% by 2030, and substituting today's needs with renewables. However, this is being done independently of vehicle emission regulations." 

The MIT Technology Review believes that China is likely to achieve its commitments under the Paris Agreement. The country was the largest emitter of greenhouse gases in 2017, at 27%, but its carbon use could peak before 2030, and by that point it hopes to source 20% of its energy cleanly. 

Heavy-duty rules 

Accompanying China 6 regulations will be China VI, which like in Europe applies to heavy-duty vehicles. Older diesel trucks are thought to be among the main offenders in harmful vehicle emissions, and the government has announced it is targeting compliance rates of at least 90% by the end of 2020. Some regions of the country will be directed to start applying the China VI-a standards as early as summer of this year, with models not meeting the requirements barred from entering the market. It is thought that in the regions surrounding Beijing, more than a million outdated diesel-fuelled trucks could be taken off the road. Full implementation of China VI-b will arrive by July 2023.

As the International Council on Clean Transportation (ICCT) has highlighted, what China does in this market really counts on a global level. For truck manufacturers, China VI will force wider use of diesel particulate filters. This could mean that two thirds of new trucks will be soot-free by 2021. Were China to take no action, this figure would stand at only 50%.

Source: Automotive World

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